Sapphire secures USDA loan guarantee for NM algae demo facility

Erin Voegele, Biorefining Magazine

The USDA announced this month that it had issued a loan guarantee to Sapphire Energy Inc. The guarantee will support the development of Sapphire Energy’s demonstration-scale algae production facility in New Mexico, which will produce “green crude” oil from algae that can be refined into transportation fuel.

“The Obama Administration is committed to providing support for renewable energy production, which will safeguard national security and create jobs in rural America,” said Agricultural Secretary Tom Vilsack. “This project represents another step in the effort to assist the nation's advanced biofuel industry produce energy in commercial quantities from sustainable rural resources.”

Sapphire Energy is constructing a $135 million integrated algal biorefinery (IABR) in Columbus, N.M. According to the USDA, the IABR will be capable of producing 100 barrels of refined algal oil per day, equivalent to at least 1 million gallons per year. The oil will be shipped to the Gulf Coast, where it will be refined into drop-in biofuels by Geismar, La.-based Dynamic Fuels.

According to Tim Zenk, Sapphire Energy’s vice president of corporate affairs, his company has been working to finalize the loan guarantee since late 2009. The $135 million project is under development using a $50 million federal grant, the recently finalized $54.5 million loan guarantee and $30 million matching funds contributed by Sapphire Energy.

Construction on the first phase of the project began in June, Zenk said. “The project will be built in three distinct phases,” he said. The first portion of the project will include 100 acres of algae cultivation. “We’ll do everything from cultivation to harvest and extraction,” Zenk said. “Then the oil will be refined in a typical refinery into diesel and jet fuel. At full capacity, once all three phases are built over the next three years, we’ll be producing a million gallons of jet and a million gallons of diesel per year.” The final stage of the project is scheduled to be operational by 2015.